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Is Washington turning into a seller's market?

Guy Wolcott, co-founder of Sawbuck.com, the online brokerage based in D.C., shared some local inventory numbers with me recently. Looking at the inventory of homes listed for sale on the local multiple listing service, Metropolitan Regional Information Services, the cupboard is pretty bare in spots.

At the current sales pace, Manassas Park City has just 1.3 months' worth of listings. Manassas City, just 1.4 months. Falls Church City, 2.1 months; and Fairfax County just 2.7 months. Arlington County has 3.9 months

The rule of thumb says 6 months' inventory marks a balanced market--favoring neither sellers nor buyers. According to the MLS data, the Washington metro area as a whole has only 4.5 months supply available--making it a bit of a seller's market. The District, proper, has 5.1 months' supply.

Montgomery County has only 3.8 months' supply, but with that exception, Maryland still has enough inventory that favors buyers. Prince George's County has 8.1 months' supply, and the Maryland suburban counties, combined, have 8.4 months' supply.

Weekend Reading: In Saturday's Real Estate section we have a fun story about local artists who specialize in rendering homes as art--following a tradition that dates back to old Pompeii.

Before you rent that basement: Michele Lerner at UrbanTurf.com has a good post on the hoops D.C. homeowners need to jump through before renting out an apartment. It brings to mind the tenants who died a few years ago from a fire in a Georgetown basement bedroom. Preventing such tragedies is the motivation behind the city's safety requirements.

Chat day: Don't miss today's Real Estate Live chat at 1 p.m! With the extension of the home purchase tax credit and revelation of FHA's low reserves, we ought to have plenty to talk about. If you can't make it at 1, send in your comments and questions early.

The Weekend Poll


This is a non-scientific user poll. Results are not statistically valid and cannot be assumed to reflect the views of Washington Post users as a group or the general population.



By Elizabeth Razzi  |  November 13, 2009; 12:48 PM ET
Categories:  Buying , Poll , Selling , Statistics , The economy , The market , Weekend Poll  
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Comments

I don't think the metro area was much of a buyer's market in the recent recession, it's been pretty stable overall, with PG and PW counties being the exceptions.

That begs the question: What's the inventory rate of Prince William? Given that it had (still has?) a glut of foreclosures it seems that Manassas, Manassas Park, and Falls Church are outliers in that their markets are too small overall.

Posted by: cpwdc | November 13, 2009 2:05 PM | Report abuse

I'm sending this to all my clients who still believe that the "deals of the century" are still awaiting them in DC.

Posted by: ssmd11 | November 13, 2009 2:10 PM | Report abuse

I hardly we think we're going back to anywhere close to a seller's market for 2 reasons:

1- By now, sellers are savvy enough to know that November-Superbowl is the worst time to sell a house, so the reduced number of listings are a reflection of folks simply pulling the listings off until the spring.

2- The $8K tax credit has helped sales, but once again, that is another artificial prop for the housing market and once that goes away next summer, the housing market will return to its former 2008-09 funk.

Posted by: MoCoPride | November 13, 2009 2:18 PM | Report abuse

It's not looking like a seller's market in my part of Silver Spring where the homes are bigger than first-time buyer homes.

It could be that apartment to home sales for first-time buyers are clearing out the first-time inventory, but we've got a couple of move-up type homes in our area that aren't doing much. Methinks more falling prices for 500-800K homes.

Posted by: RedBird27 | November 13, 2009 2:30 PM | Report abuse

Odumbo will print more money to extend the home-buyer's tax break, so it will create yet another mini-bubble.

We are doomed.

Posted by: tjhall1 | November 13, 2009 3:06 PM | Report abuse

It is not necessarily the market that prohibits my jump into the local housing market, it is what you get for the money. I think that it is great that the outlier areas will present greater opportunities for home buyers in the near future. For what you get for your money, I'd take the commute.

Posted by: concernedaboutdc | November 13, 2009 4:13 PM | Report abuse

The heading is misleading, you mention on the suburbs. Is Washington DC a sellers market too?

Posted by: vabreman | November 13, 2009 4:41 PM | Report abuse

What would be more telling than months of supply is the volume of transactions that are occurring. I doubt that the usual rules of thumbs of much value given what has occurred and the government's "extend and pretend" policies. My sympathies go out to ssmd11's clients.

Posted by: johnbowers | November 13, 2009 5:10 PM | Report abuse

Yes ... Government intervention and banks manipulating the supply and reworking potential foreclosures has worked very well. The banks will hold on to the inventory and release a few homes at a time so it will always look like a sellers market.

Is there anything else the real-estate industry would like to have at tax payer expense ???

Posted by: free_np | November 13, 2009 5:29 PM | Report abuse

@cpwdc,
If you want to check out the inventory level of any area, you can search on Sawbuck (www.sawbuck.com). Just type in "Prince William County" and look up at the top under "Market Overview" -- currently, Prince William County shows 2.2 months of inventory: http://www.sawbuck.com/area/DC_Metro/Prince_William_County,VA/145.

@vabreman,
As Elizabeth mentioned, Washington has 5.1 months of inventory, which you can track here: http://www.sawbuck.com/market_guide/DC_Metro/Washington,DC/1893.

Posted by: cynthiapang | November 13, 2009 9:06 PM | Report abuse

A few days back the builders and the realtors were begging congress ... extend the tax credits or else the entire housing industry will just die!

Now, the realtors claim we are in a sellers market and the chief economist of the realtors claims he expects housing prices to go up by 4% next year - that's quite a turn around in 2 weeks.

The reality for most of us in the country on main street is that wage increases are looking virtually impossible. Add to that we have fellow consumers that are just broke and a broke banking/finance system with Fannie, Freddie, FHA and about 125 failed banks due to bets by the real-estate gamblers and innocent people just got suckered in.

The group should just stop trying to pump up the market for personal gain and just go find something more constructive to do for the nation. As tax payers we'll just pick up the tab for the mess but the government should really stop helping the real-estate industry [it only leads to higher living costs on main-street].

Posted by: free_np | November 14, 2009 8:59 AM | Report abuse

Historically, markets tend to over-shoot or over-correct due to psychological fears that are part of human behavior. When the housing market was flying sky high, no one thought (well a few) that the bubble would soon pop. The same thing happened when the housing market was in free fall.

Psychological fears paralyze our nerve, making us to believe that the market will keep tanking or home prices will keep falling, thus causing over-correction.

Home prices have bottomed and now have no way to go but up - particularly in the DC metro area. Of course, real estate has always been local. And locally, we have one of the strongest regional economies in the nation.

As long as buyers stay within their budget, now is the time to buy a home. Over 99% of experts failed to foresee the financial and housing crisis; the remaining 1% that was correct did not offer much of a solution.

So listen to yourself and decide what's best for you and your family. The experts, one way or another, will be wrong anyway.

Posted by: wesley5 | November 14, 2009 8:51 PM | Report abuse

"I'm sending this to all my clients who still believe that the "deals of the century" are still awaiting them in DC.

Posted by: ssmd11 | November 13, 2009 2:10 PM"

Typical lowlife realtor, screwing their clients yet again.

Posted by: Jerkstore | November 20, 2009 3:30 PM | Report abuse

Gee, wesley5, with your econ 101 -- realtor much? And every other word or phrase it right out of the NAR or Remax ads. BARF.

Posted by: Jerkstore | November 20, 2009 3:32 PM | Report abuse

The comments to this entry are closed.

 
 
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